Carrefour, CAC 40 all-time high at close of Thursday, December 15, 2022 – – 12/15/2022 at 5:47 PM

(AOF) –

crossroads

(+1.35% to 15.82 euros)

The distributor stood out throughout this session, of which only two other CAC 40 actions ended in the green.

AOF – LEARN MORE

key points

– First European food distributor and second in the world;

– Activity of €78.1 billion concentrated in four major markets, France with 45% of sales, rest of Europe -Belgium, Spain, Poland, Romania and Italy, Latin America -Brazil and Argentina-then Taiwan;

– Ambition to become a world leader in the food transition with a focus on fresh and organic products through the global program Act for food (healthy food, local and accessible to all);

– Capital marked by the strong presence of 5 shareholders: the Moulin family, also owners of Galeries Lafayette (12.91% of the shares and 17.75% of the voting rights), Peninsula Europe (7.61% and 11.83%) , Cervina Europe (4.99% and 7.67%) and Bunt (3.17%), with the 16-member Board of Directors chaired by Alexandre Bompart, Chairman and CEO;

– Financial position with shareholders’ equity of €11.3 billion and stable net debt of €2.6 billion Record free self-financing of €1.3 billion.

challenges

– Strategy 2023 based on 2 pillars: global Act for food program and ambition to be a world leader in e-commerce with duplicate objectives: productivity through investments of 1.7 billion euros per year in commercial competitiveness and own brand (30% sales) / omnichannel universe: opening of convenience stores, expansion of Promocash in France, acceleration of the Cash&Carry format with 20 new Atacadão a year in Brazil, etc. / additional savings of €2.7 billion;

– “Data-centric, digital first” innovation strategy around 4 axes: e-commerce acceleration (tripling in 2026 vs 2021), retail data and media ramp-up, digitization of financial services and distribution channel operations traditional: €2.8 billion in investments in information systems/strategic partnerships for the Carrefour Links platform;

– “Act for food” 2025 environmental strategy for carbon neutrality by 2040: reduction of indirect emissions by 35% in 2025 and 40% of direct emissions / circular economy: 100% reusable packaging / food transition: 45,000 organic partner producers , quality location or sector, 300 suppliers committed to the food transition pact (vs. 114 in 2021) / “green” loan launch;

– Acceleration of disposals of non-strategic assets (rumored disposal of Taiwanese activities) and openings of convenience stores;

– Continued market share gains in France, Brazil and Spain, the top 3 countries in the group with 8/10 of current operating profit.

challenges

– Negative impact of currencies, especially the Brazilian real;

– Sustained increase in inflation in transport, energy and food, which will be offset by cost reductions and the reinforcement of Carrefour branded products;

– Integration of the BIG Group, 3

th

food distributor in Brazil and 172 Supersol stores and supermarkets in Spain;

– Objectives for 2022: €4.8 billion in organic products, 1/3 of sales under the Carrefour brand.

Learn more about the “supermarket” sector

Two major challenges for the sector

Revenue from retail brands increased 6.6% in the third quarter of 2022, according to panelist IRI. Such a performance had not been recorded since the 2020 confinements. However, since the end of September, volumes have been falling after price increases. The results of the French players, largely spared so far, must therefore suffer. In addition, in the United States, Walmart and Target issued warnings about their results.

Another challenge: logistical disruption. According to data from NielsenIQ, the breakage rate rose further on shelves to 5.8% at the end of October. This represents a deficit of 3.5 billion euros since the beginning of the year. According to the U System, these disturbances have never been observed for more than fifty years. The reasons are multiple: both climatic, geopolitical, logistical, inflationary, and linked to the behavior of consumers, who stock up on certain items. On the other hand, the strike at the refineries seems to have had little impact because the brands were able to organize themselves.

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